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US coal battered by a decade of decline

THE amount of coal produced per employee hour has declined since its peak in 2000 in most US regi...

Sadie Davidson

Following a rise in productivity in the late 1990s due to technological improvements, the rate of production reached a peak in 2000 and has noticeably declined since.

Coal mining productivity, the measure of the clean tonnes of coal a mine produces per employee hour, is highly variable across different operations.

Factors affecting productivity include the method of coal mining, such as underground versus surface, regional and geological variables.

SNL reports that while most basins had a slight growth in productivity rates in 2013, due to factors such as idling the most inefficient mines, operators have been increasingly focused on various cost-cutting measures, including worker productivity.

In the Central Appalachian Basin, productivity at underground coal mines reached a peak at 4.15 short tons per employee hour in 1999.

Since then, the CAB has experienced a 54% decline in full-year underground productivity with 2013’s productivity at 1.92 short tons per employee hour.

Illinois Basin data tells a different story.

In addition to avoiding the industrywide trend of feigning production, the basin is generating improvements in productivity.

Coal from underground mines in the basin surged 22% from 2009’s level, to an average rate of 4.52 short tons per employee hour in 2013, a rate close to the basin's 19-year peak in 1999.

The Powder River Basin, where development is relatively new, has also begun to see declines in surface mining productivity as well.

From a peak of 42.01 tons per employee hour in 2001, production had declined more than 28% to 30.05 short tons per employee hour by the end of 2013.

"Production is down probably due to many reasons, a big one being drop in demand, but why would companies spend money to hire more employees if they know they are not producing as much?” Energy Information Administration expert Nicholas Paduano said.

“I would guess they need more employees just to mine the same amount, or less than before because the coal being mined is harder to get out.”

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